Member States will be free to allow micro-entities to draw up a very simplified balance sheet and profit and loss account along the lines specified in the Directive.
The European Commission welcomed the European Parliament's vote on 14 December approving measures to considerably simplify life for more than 5 million of the smallest companies in Europe. Allowing these companies to benefit from a very simple system of financial reporting will mean that they can free up resources to invest in their businesses and deliver further growth.
In 2009, the European Commission tabled proposals to reduce burdensome accounting rules for Europe's smallest companies – so-called "micro entities". From next year, it will be possible for Member States to radically simplify the way in which micro-entities prepare their accounts. When it comes to publishing accounts, governments will be able to create a "one-stop-shop" which would see micro-entities only having to send their accounts to the tax administration, which would in turn be responsible for passing the accounts onto the Company Registry. Today, in many countries micro-entities have to file a full set of financial statements, including the balance sheet and profit and loss account, and are required to disclose this through publication in a national gazette.